Nomura cautions against overstating the economic impact of Taylor Swift's Eras Tour.

• The Eras Tour by Taylor Swift likely positively impacted local economies where she performed, but Nomura predicts that the national-level effect may be less significant than some expect.
• The tour is estimated to have increased nominal U.S. retail sales by 0.03% and real GDP by 0.02% between Q1 and Q3 of 2023.

Taylor Swift is a friend to local economies, despite the devilish intricacies involved.

The Eras Tour of the American pop star has been going on for nearly a year, both in the U.S. and worldwide. The economic impact of her "Karma" show has attracted the attention of various institutions, including the Federal Reserve and Wall Street.

According to a new report from Japanese investment bank Nomura, her tour likely had a positive impact on the local economies she visited. However, the firm is uncertain about the extent to which it influenced national data.

US economic analysts were captivated by the increase in her consumption, but we believe the overall macroeconomic impact may have been exaggerated, according to Nomura global economist Si Ying Toh, who wrote to clients last week.

Nomura estimates show that Swift's venture increased nominal U.S. retail sales by 0.03% and real gross domestic product by 0.02% between the first and third quarter of 2023.

In 2023, the 14-time Grammy winner's tour contributed to only 0.5% of nominal consumption growth, according to the firm's calculations.

The economic boost, referred to as the "Swift-lift," is undeniable for the 20 cities in the US that Toh visited, despite some considering the data points as marginal.

During Swift's visit, lodging inflation increased by 2.1 percentage points, according to STR data cited by Toh. Trivago data also shows a similar rise.

Swift's three shows in Chicago led to a 3.1% increase in lodging prices, an 8.1% increase in occupancy, and a 59% increase in hotel revenue per available room in the city, which is the third-most populated in the U.S.

The CPI for an Illinois city rose by 0.5 percentage points after the singer's visit. The CPI is a measure of the cost of a basket of goods and services over time.

While it is unlikely that these local improvements will be reflected in national-level statistics from larger economies such as the U.S., U.K., or Japan, Toh said that these events should still be monitored as potential economic catalysts in countries worldwide.

According to Toh, small economies like Singapore and Sweden could experience the greatest macroeconomic benefits from her tour internationally.

Economic modeling relies on exogenous shocks, which can take the form of extreme weather events, pandemics, or pop concerts, according to Toh. In recent years, concert tours have become significant social phenomena and may also drive economic activity.

The film version of Swift's tour will begin streaming on Disney+ on March 15, while the tour is set to end near the end of 2024.